My pitch deck for a Homeland Security Fund, circa 2004. The objective was to bring early stage capital into the development of new technologies for homeland security and terrorism detection.

1. Pluribus Capital Management
Invest in those technologies, services and companies
that will improve Homeland, Global and Corporate Security
while delivering high returns for investors

2. Homeland and Global Security
A new growth market
 The Homeland and Global Security(HGS) market is
defined as:
 The technologies, products, and services required by the Private
and Public sectors in order to ensure the normal operation and
continuity of commerce, infrastructure services, transportation,
logistics and communication in the case of :
 Terrorism, Espionage and Sabotage
 Natural Disasters
 Radiological/Biological/Chemical agent outbreaks and attacks
 Cybercrime
 Cataclysmic events and outages

3. What s the economic opportunity?
 Prior to Sept 11, US spent $10B/year on homeland
security
 After Sept 11, that number has increased to $40B/
year with a 5-10% growth rate/year
 In June 2004 DHS awarded US-VISIT(biometric
customs screening) contract
 $10B To a single company(Accenture)

4. Large HGS Market Size*
 In a recent report by Equity International, public sector
homeland security spending (federal, state, local) in the
United States is projected to rise to $55.9 billion during
2004 and to $56.8 billion in 2005
 In the UK, 93% of businesses with over $1B in revenue
polled believe that terrorism will increase over the next 2
years as a result of the Iraq war, and that their operations
will be affected somehow**
 Global spending by governments on homeland security
will rise to $562 billion in 2004 and to $572 billion in
2005
*Centre for Global and Homeland Security, 2003
** RAND/Janusian Terrorism Survey, 2004

5. Private Spend vs Public Spend
Total US Spend Between $93B and $139B in FY 2003
The biggest rise in spending is likely to come from the private sector
---Fortune, The Fruits of Safety , June 28 2004

6. Current and Projected Size of Security Markets
Estimated
1995 2002 Est. Five-Year
Market Market Compound
Size ($ Mil.) Size ($Mil.) Growth (%) What is Different?
Physical Security Then-1995 Now-2002
Guards $12,000 $18,000 5.0% 7.0% Pricing, quality slowly improving at largest U.S. brands; must
Improve on 4% EBIT margins. Wither Ira Lipman?
Armoring 2,000 8.0% Not Covered in 1995; includes government contracts
Personnel armoring/protection 1,500 8.0% Not Covered in 1995; includes government contracts
Intelligence, Investigations, Consulting 8,000 9.0% Post 9-11, post-Enron business soars;Not Covered in 1995
Specialized Protection 3,000 12.0% Not Covered in 1995
Armored:
Armored Transport 1,200 1,600 5.5% 5.0% Slower growth, significant consolidation.
Ancillary, Outsourced Services 450 1,200 20.0% 15.0% ATM, counting, coin wrapping up to 50% of revs.
Electronic Security
Alarm Monitoring ((Commerical) 3,500 4,950 7.0% 7.0% Massive consolidation virtually over. ADT with 35% share!?!
Alarm Monitoring (r(Residential) 2,500 4,800 17.0% 10.0% Sanity returns as credit scores mean something again.
Alarm Equipment (Comm. &
Res.)
4,000 6,900 11.0% 9.0% Tyco, Honeywell, GE, Siemens take over, encouraging integration
Fire Equipment (Commercial) 2,500 3,500 7.0% 6.0% Again – Tyco, Siemens, Honeywell and GE. Wither SPX/Edwards?
CCTV Equipment & Systems 1,200 2,600 14.0% 14.0% Digital video becomes standard and analog prices/margins plummet
Computer Security (not covered here) 1,500 7,000 30.0% 25.0%
Access Control
Door Peripherals, Cards, fences 15,000 18,000 4.0% 6.0% Assa Abloy leads in doors, Magal in high-tech fences. Look for ECSI
Electronic Access Control 675 1,200 24.0% 15.0% Tyco, Honeywell, GE, Siemens, et. al.
New Technologies:
Biometrics (law & access) 60 420 40.0% 35.0% Huge growth from tiny base. AFIS growth slow. Where are profits?
Smart/Token Cards 200 1,500 40.0% 30.0% U.S. still far behind Europe. Whose got the back end?
RFID 240 1,100 30-35% 40.0% Lack of standards, cost/benefit hamper potentially huge market
“Homeland,” Explosives Detectiion 100 2,000 30.0% Post 9-11 drives bulk and trace detection revenues
EAS 1,100 2,300 15.0% 8-9% Tyco vs. Checkpoint. Source tagging here, but now more cyclical.
Systems Integration
TOTAL
1,500 4,500
$96,000
22.0% 12-15% We were too optimistic in 1995 on integration. But TYC, HON, GE,
Siemens, will help drive total market to its potential.
© 2004, Jeffrey Kessler Sr. VP, Lehman Brothers TM Equity Research

7. Security Sector Analysis – Sector Scorecard
SECTOR
FIRE
PROTECTION
ACCESS
CONTROL
CCTV
LOCKING
SYSTEMS
BIOMETRICS
HOMELAND
SECURITY
GUARDING
SERVICES
ALARM
MONITORING
FACILITIES
SERVICES
BUILDING
CONTROLS &
MONITORING
SYSTEMS
INTEGRATION
SUPPLY
CHAIN
TECHNOLOGY
Global Market
Size
$15-$20bn $1-$2 bn $1-$2 bn $20 bn $525 mm $20 bn $43 bn $23 bn $220 bn NA NA $12 bn
Projected
Growth Rate
GDP+ 8% - 10% 9% - 11% 4% - 5% NM NA 5% - 7% 7% - 9% GDP 5% - 8% NA 13%-16%
Product vs.
Service Focus
Product Product Product Product Product Product Service Service Service Product/Svc Product/Svc Product
Technology
Intensive ◑ ◕ ◑ ◑ ● ● ○ ◑ ○ ◑ ◕ ◕
Product
Innvovation ◑ ◑ ◑ ◑ ● ◕ ○ ◔ ○ ◑ ◑ ◑
Market
Fragmentation ◔ ◕ ◑ ◑ ● ◔ ◑ ◕ ● ◑ ◕ ◕
Competitive
Pressure ◕ ◕ ◕ ◕ ◑ ◕ ◑ ◑ ◑ ◕ ◕ ◕
Acquisition
Opportunities ◑ ◑ ◕ ◑ ● ◔ ◑ ◑ ◑ ◑ ◕ ◕
Area to Focus?
● ◕ ● ◕ ◑ ◑ ◔ ◔ ◑ ◑ ◕ ◑
Low High
© 2004, Jeffrey Kessler Sr. VP, Lehman Brothers TM Equity Research

8. Homeland Security Market Forces
 The HGS sector will see considerable mergers and
acquisitions activity as a result of the need for larger
established companies to deliver more innovative solutions
 Established HGS companies will acquire best of breed startups to
supplement R&D budgets reduced during the 2000-2003 downturn
 GE Acquisition of Invision for $900M in 3/04
 Like other multi-year trends, HGS is a global market with
global needs as evidenced by:
 Madrid Train Bombings
 Saudi, Bali, Kenya, and Morocco attacks
 HSBC Bank bombings in Turkey
 Ongoing security presence in UK, France
 Emerging threat concerns in China, Japan

9. New Security Market
Consolidating
Ion Track
Invision
Kampro Technology
Kalatel
8x8
Osborn Hoffmn
Fiber Optix
Interlogix
Sentrol
ITI
Casi Rusco
InfoGraphis
GE
Notifier
Gamwell
FCI, Firelite
System Sensor
Northern
WSE
Silent Witness
(Gyyr)
Ultrak
Ademco
ADI
Honeywell
Phillips
Burle
Detection Systems
Radionics
Ready Key
Bosch
Motorola Indala
HID
(et all)
Securitron
Yale LocK
Medeco
Assa Abloy
Sensormatic
DSC
ADT
Simplex
Grinnell
Tyco
© 2004, Sandra Jones and Company

10. Future Drivers
 Money makes the world go round
 Global economy
 War and politics
 Government spending
 Fear and treat
 Technology evolution
 Battle of the brands
 Things not on our radar screen

11. Defense sector vs. HGS sector
Force Protection, the unexploited niche
 The Aerospace and Defense sectors are historically
oriented towards Force Projection solutions
 Overseas military use
 There has historically been a lack of focus on Force
Protection solutions, to protect against:
 Improvised Explosive Device (IED) attacks such as in Iraq
 Attempted missile (MANPAD) attacks on commercial jetliners
 The HGS market category embodies the new global
focus on force protection ;the HGS market is evolving as
more spending occurs in the private sector
 70% of US Critical infrastructure (oil wells, chemical plants,
computer systems) is in the private sector

12. The Innovation Problem
Large Capabilities Gap
 Recent observations from Department of Homeland
Security Advanced Research Projects Agency (HSARPA)
bidders conferences reveal gaps between existing
technology and needs:
 Example: Current DHS focus is on complete Systems vs.
Components
 Result: DHS is funding yesterday s technology, not best of breed
innovation from universities and small startups
 An opportunity exists to introduce best of breed
technology where current market standards are best
available
 Startups don't necessarily build complete systems but can create
ecosystems with larger companies to deliver full systems

13. Top DHS/Public Sector Investment Opportunities*
I. BioSurveillance/Biosensors
II. US-VISIT Program
III. Radiation Detection Equipment and Technology
IV. Anti-Missile Technology for Commercial Aviation
V. Intelligence Integration and Risk Analysis Systems
VI. Explosive Detection and Baggage Systems
VII. Air Cargo Security Technology
VIII. Remote Video Surveillance Technology
IX. Identification and Credentialing Systems and Technologies
X. Vaccine and Medication Stockpiles
XI. Cyber Security
XII. DHS Human Resources System
XIII. Operation Center Establishment and Management
*Civitas Group LLC, Implications of President s 2005 DHS Budget Request

14. Private Sector Investment Areas
 High Availability
 Disaster Recovery
 Business Continuity Solutions
 Data Storage/Networking
 LT Hardened storage
 Enterprise and Internet
Software
 Business Intelligence, Data
Warehousing
 Network Availability and
Management
 Nuclear/Biological/Chemical
 Environmental Technologies
 Water/Power/Food Production
and Security solutions
 Information Security
 Wireless and Satellite
Communications
 Unmanned Aerial Vehicles &
Robotics
 Risk Management and Insurance
Services
 Explosive Detection and Narcotic
Interdiction
 Physical Security
 Surveillance and Video
 Logistics, Trade and
Transportation Systems
 Navigation Technologies

15. Biometrics Data Mining Wireless RFID
Internet &
Remote Video
Fiber Optics
& Bandwidth
GPS
?Unknown
Today
Intelligent Video
© 2004, Sandra Jones and Company
Technologies to Watch

16. National Focus with
Targeted Investment Regions
DC/NOVA
• Federal Lab
Infrastructure
Atlanta
• Info Security
• CDC
LA-Long
Beach
• Defense
Integrators
New
England
• MIT/Draper
San Diego
• Bioscience
• Defense Integrators/
Infrastructure
Silicon Valley
• LBL/LLNL
• Stanford/UCB
• NPS
RTP/Carolinas
• Biotechnology

17. Conclusion:
Homeland and Global Security (HGS) is an excellent Early
Stage Investment Category
 Serves a Market need in closing the gap between
Systems vs. Components
 Potentially generates high returns for investors
due to
 Cyclically low valuations for seed/A round investing
 M&A activity